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Discrete forecast horizons for two-product variants of the dynamic lot-size problem


  • Dawande, Milind
  • Gavirneni, Srinagesh
  • Naranpanawe, Sanjeewa
  • Sethi, Suresh P.


Motivated by the recent success of integer programming based procedures for computing discrete forecast horizons, we consider two-product variants of the classical dynamic lot-size model. In the first variant, we impose a warehouse capacity constraint on the total ending inventory of the two products in any period. In the second variant, the two products have both individual and joint setup costs for production. To our knowledge, there are no known procedures for computing forecast horizons for these variants. Under the assumption that future demands are discrete, we characterize forecast horizons for these two variants as feasibility/optimality questions in 0-1 mixed integer programs. A detailed computational study establishes the effectiveness of our approach and enables us to gain valuable insights into the behavior of minimal forecast horizons.

Suggested Citation

  • Dawande, Milind & Gavirneni, Srinagesh & Naranpanawe, Sanjeewa & Sethi, Suresh P., 2009. "Discrete forecast horizons for two-product variants of the dynamic lot-size problem," International Journal of Production Economics, Elsevier, vol. 120(2), pages 430-436, August.
  • Handle: RePEc:eee:proeco:v:120:y:2009:i:2:p:430-436

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    References listed on IDEAS

    1. Jaruphongsa, Wikrom & Cetinkaya, Sila & Lee, Chung-Yee, 2004. "Warehouse space capacity and delivery time window considerations in dynamic lot-sizing for a simple supply chain," International Journal of Production Economics, Elsevier, vol. 92(2), pages 169-180, November.
    2. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    3. Harvey M. Wagner, 2004. "Comments on √úDynamic Version of the Economic Lot Size Model√Ě," Management Science, INFORMS, vol. 50(12_supple), pages 1775-1777, December.
    4. Porras, Eric & Dekker, Rommert, 2008. "A solution method for the joint replenishment problem with correction factor," International Journal of Production Economics, Elsevier, vol. 113(2), pages 834-851, June.
    5. Suresh Chand & Vernon Ning Hsu & Suresh Sethi, 2002. "Forecast, Solution, and Rolling Horizons in Operations Management Problems: A Classified Bibliography," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 25-43, September.
    6. Suresh Chand & Thomas E. Morton, 1982. "A Perfect Planning Horizon Procedure for a Deterministic Cash Balance Problem," Management Science, INFORMS, vol. 28(6), pages 652-669, June.
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    Cited by:

    1. Vargas, Vicente & Metters, Richard, 2011. "A master production scheduling procedure for stochastic demand and rolling planning horizons," International Journal of Production Economics, Elsevier, vol. 132(2), pages 296-302, August.


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